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Rough Diamond markets and covid-19

DESPITE SUCCESSFUL VACCINATION DRIVE IN SOME COUNTRIES, COVID-19 STILL IMPACTS ROUGH DIAMOND MARKETS

 

Spikes in COVID-19 infections in Western Europe and India have had the effect of dampening the recovery in rough diamond supply, as De Beers announced that it had 20 percent fewer rough diamond sales during its third sales cycle of 2021, compared to the second cycle of the year.

According to the company, the value of the third sales cycle, out of the 10 that are scheduled to take place over the course of the coming year, was down to $440 million, from the 550 million that was reported for the second sales cycle of 2021.

But, commenting on the results, Bruce Cleaver said the general trend of solid sales, which followed a good holiday season at the end of last year, has continued during the first quarter of 2021. “Sales were in line with expectations and both market sentiment and overall industry conditions remain positive,” he stated.

“However, with pandemic developments in Europe and Mumbai’s recent lockdown resulting in the Bharat Diamond Bourse being closed, it is clear that we will continue to see challenges relating to COVID-19,” Cleaver continued.

De Beers noted that the the $440 million was provisional diamond sales figure, representing expected sales from March 22 through April 6. Mild adjustments could be made later, based on completed sales.

INDIAN BOURSE SHUT DOWN IN APRIL

COVID infections are sharply down in a number of diamond centers, most notably Israel, which leads the world in the percentage of its population that has received the full dose of vaccinations against the coronavirus. But in India and continental Western Europe, where the vaccination drive is a sluggish, there have been a wave of new infections and hospitals are under pressure. The result is a new set of lockdowns.

In Mumbai, the Bharat Diamond Exchange shut down from April 5, and its management said that the facility will remain closed until further consideration. It is expected it will not open before the end of the month. Members were asked to keep alarm systems functional and other supplies like water and electricity switched off.

The State of Maharashtra, where the Bharat Diamond Bourse is located, recorded its highest single-day spike since the pandemic outbreak last year on April 4, when 57,074 new COVID-19 cases were reported. This broke the highest single-day infection record of 49,447, which was set only one day earlier.

The administration of the Bharat Diamond Exchange

The administration of the Bharat Diamond Exchange, India’s largest diamond trading facility, said that operations would be shut down from April 5 as a result of the COVID-19 lockdown, and will remain closed until further consideration, possibly until the end of the month.

Belgium went into a four-week lockdown on March 24, with virus circulation at its highest circulation in four months. Non-essential travel outside the country was forbidden, and a 12:00 PM to 5:00 AM curfew was imposed. The city’s diamond district continued to function, however, according to center’s leading trade association, the Antwerp World Diamond Center (AWDC).

Antwerp World Diamond Center (AWDC)

Belgium went into a four-week lockdown on March 24, but the city’s diamond district continued to function, however, according to center’s leading trade association, the Antwerp World Diamond Center (AWDC).

ALROSA EXTENDS SUPPLY CONTRACTS

The ongoing COVID pandemic was cited by the Russian rough diamond producer Alrosa for its deciding provide a second extension to existing three-year rough diamond supply contracts. The company this was designed to help its clients cope with market uncertainty. Under usual circumstances, the company would have finalized its long-term client list by the end of last year. Long-term contracts account for some 70 percent of Alrosa’s total revenue.

“We are extending our existing long-term contracts and formalizing our recent months’ practice of working upon clients’ requests without mandatory allocation of goods,” said Evgeny Agureev, Alrosa’s deputy CEO.

In a statement, the Russian company explained that its decision would allow for increasing the purchase history relevance after the pandemic-related pause in 2020, in order to use it for drafting an offer that would fully meet the clients’ actual requirements.

“The adaptation of our supply to the real demand is aimed at ensuring support for an emerging supply demand balance,” the statement declared.

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